Your Directors have pleasure in presenting their 42^nd Annual Report along with the summary of standalone and consolidated financial statements for the financial year ended March 31, 2023 of Magellanic Cloud Limited "the Company").

FINANCIAL RESULTS

The summarized financial performance of the Company for the FY 2022-23 and FY 2021-22 is given below:

REVIEW OF OPERATIONS:

Standalone:

During the year under review, the Standalone total Income was INR 5610.51 Lakhs as against INR 1767.82 lakhs for the corresponding previous year.

Total Comprehensive income for the period was INR 1068.94 Lakhs as against INR 249.56 Lakhs in the corresponding previous year.

Consolidated:

During the year under review, the consolidated total Income was INR 44656.91 lakhs as against INR 28277.44 lakhs for the corresponding previous year.

Total Comprehensive consolidated income for the period was INR 9404.69 Lakhs as against Net INR 2741.55 lakhs in the corresponding previous year.

TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profits in the profit and loss account.

DIVIDEND

The Board of Directors have recommended a Dividend of Re. 0.15 per share (on face value of INR 10/- each for the Financial Year ended March 31, 2023.

STATE OF THE COMPANY’S AFFAIRS AND FUTURE OUTLOOK

During the year under review the Company has added new activities in their main object clause such as to develop, provide, undertake, design, import, export, distribute and deal in Systems and application software for microprocessor based information systems, off shore software development projects, internet service provider, and solutions in all areas of application including those in Emerging niche segments like Internet and Intranet website applications solutions software enterprise, resource planning, e-commerce, value added products, Remotely Piloted Aircraft System (RPAS) like Drones and others, Metaverse Technologies such as Virtual reality (VR), augmented reality (AR) and Internet of Things (IoT) technologies.

KEY DEVELOPMENTS

1. Change of registered office from the” State of Maharashtra” to the "State of Telangana”:

With the approval of members at the AGM held on August 10, 2022, the Company has changed it’s registered office from the” State of Maharashtra” to the” State of Telangana” to carry on the business of the Company more economically and efficiently and with better operational convenience and to explore the business opportunity available in the market. Further, the Management hopes to garner more business and strengthen the financial position of the Company by venturing and exploring new markets and avenues.

2. Acquisition of Scandron Private Limited:

The Company has acquired 70% shares of Scandron Private Limited, a company incorporated under the laws of India, and having its registered office at Dallas Center 6th floor 83/1 plot No. A1,Knowledge City Rai Durg, Hyderabad 500032, via Share Purchase Agreement(SPA), by way of cash consideration approximate of INR. 20,00,000,(Indian National Rupees Twenty Lakhs Only). The above acquisition is expected to provide better growth and expansion.

3. MCLOUD, through its wholly owned subsidiary, Provigil Surveillance Limited, has secured an order to supply, install and commission alert based monitoring and control system for e-surveillance of a prestigious public sector bank. The contract is awarded post competitive bidding and will enable MCLOUD to provide E-Surveillance services to 1,848 branches of the Bank spread across India for a total period of 5 years. MCLOUD through this contract will earn revenue of Rs. 6,650 per branch per month and has potential to generate revenues to the tune of Rs. 150 Mn per year over the 5 years Contract Period. Considering the size of branches, scale of contract and scope of services, this order will likely yield healthy profit margins. The Equipment and devices to be installed by MCLOUD uses AI based technology to monitor, detect, and prevent potential theft. Further, this order-win is a testimony of MCLOUD’s strong presence in the E-surveillance segment and showcases the trust placed by clients in MCLOUD’s team and provision of quality of services.

4. MCLOUD, through its wholly owned subsidiary, Provigil Surveillance Limited, has secured an order to provide end-to-end implementation and management of E-surveillance of ATM sites in 8 geographical circles spread across India. The contract is awarded post competitive bidding and will enable MCLOUD to provide E-Surveillance services to 3,032 ATM sites of a well-known Public Sector bank. MCLOUD through this contract will generate revenues to the tune of Rs. 130 Mn. per year for the five-year contract period. Considering the scale of contract and scope of services, this order will likely yield healthy profits margins and add a new reputable client to our existing list of marquee clientele. This order-win is a testimony of MCLOUD’s dominant presence in the E-surveillance segment and showcases the trust placed by clients in MCLOUD’s team and provision of quality of services.

SHARE CAPITAL

1. Increase in Authorised Capital:

As on March 31, 2023, the authorized capital of the company is Rs. 175 Cr. divided into 17.50 Cr. Equity Shares of Rs. 10/- each.

During the year company has increased its authorized capital from Rs. 55 Cr. to Rs 175 Cr. By creation of additional 120 Cr. Equity Shares of Rs. 10/- each aggregating

to Rs. 120 Cr. And same was approved by the members of the company at the ExtraOrdinary General Meeting held on March, 8 2023.

2. Preferential allotments:

On March 09, 2023, the Company has allotted 11,33,500 Equity Shares of Face Value of f 10/- each at a premium of f 385/- each amounting to Rs. 44,77,32,500/- to Strategic Investors being Non-Promoters on Preferential Allotment basis through Resolution passed in the Extra Ordinary General Meeting held on 8th March, 2023.

3. Bonus Issue:

The Board of Directors of the Company at their Meeting held on Thursday, 23^rd March, 2023 has allotted 8,76,59,268 Equity Shares of face value of Rs.10/- each as fully-paid up Bonus Equity Shares in the ratio of 3 (Three) Equity Shares for every 1 (One) existing Equity Share held by the Members in the Company whose names appeared in the Register of Members / List of Beneficial Owners as on Wednesday, 22^nd March, 2023 being the Record Date fixed for this purpose.

Consequent to the aforesaid allotment of Bonus Shares, the Paid-up Equity Share Capital of the Company stands increased from Rs. 29,21,97,560/- divided into 2,92,19,756 Equity Shares of Rs. 10/- each to Rs. 1,16,87,90,240/- divided into 11,68,79,024 equity shares of Rs. 10/- each

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

> Retire by Rotation

In accordance with section 152(6) of the Companies Act, 2013 and in terms of Articles of Association ofthe Company Mr. Jagan Mohan Reddy Thumma [DIN: 06554945], Executive Director of the Company, retires by rotation and being eligible; offers himself for reappointment at the forthcoming 42^stAnnual General Meeting. The Board recommends the said reappointment for shareholders’ approval.

> inductions/Appointment or Re-appointment of Director/KMP:

During the year under review Mr. Sadhu J. Shetty has resigned from the post of Company Secretary w.e.f. April 15, 2022, and Mr. Sameer Lalwani was appointed as Company Secretary and Compliance Officer of the Company w.e.f. April 19, 2022.

Further, Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are:

DISCLOSURES BY THE DIRECTORS

All the directors of the Company have confirmed that they satisfy the fit and proper criteria as prescribed under the applicable regulations and that they are not disqualified from being appointed as directors in terms of Section 164(2) of the Companies Act, 2013.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Director(s) have submitted their disclosure to the Board that they fulfill all the requirements as to qualify for their appointment as Independent Director, under the provisions of section 149 of the Companies Act, 2013 as well as Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the Listing Agreement / Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The Directors expressed satisfaction with the evaluation process.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) & 134 (5) of the Companies Act, 2013, the Board of Directors of the Company hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis; and

(e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

NUMBER OF BOARD MEETINGS

A calendar of meetings is prepared and circulated in advance to the Directors During the year, 16 (Sixteen) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015.

Further, Committees of the Board usually meet on the same day of formal Board Meeting, or whenever the need arises for transacting business. The recommendations of the Committees are placed before the Board for necessary approval and noting.

COMPOSITION OF AUDIT COMMITTEE

Your Company has formed an Audit Committee as per the Companies Act, and the Listing Agreement / SEBI (LODR) Regulations, 2015. All members of the Audit Committee possess strong knowledge of accounting and financial management.

Further, the Audit Committee is functional as per the provision of Section 177 of Companies Act, 2013 and Rules made thereunder and as per Regulation 18 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The other details of the Audit Committee are given in the Corporate Governance Report, appearing as a separate section in this Annual Report.

COMPOSITION OF NOMINATION & REMUNERATION COMMITTEE

Your Company has formed a Nomination & Remuneration Committee to lay down norms for determination of remuneration of the executive as well as non-executive directors and executives at all levels of the Company.

The other details of the Nomination & Remuneration Committee are given in the Corporate Governance Report, appearing as a separate section in this Annual Report.

NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors. This policy also lays down criteria for selection and appointment of Board Members. The Board of Directors is authorized to decide Remuneration to Executive Directors. The Remuneration structure comprises of Salary and Perquisites. Salary is paid to Executive Directors within the Salary grade approved by the Members. The Nomination & Remuneration committee has been assigned to approve and settle the remuneration package with optimum blending of monetary and non-monetary outlay.

In terms of requirements prescribed under Section 178(3) of the Companies Act, 2013, the Nomination and Remuneration Policy inter-alia providing the terms for appointment and payment of remuneration to Directors and Key Managerial Personnel.

During the year, there have been no changes to the Policy. The same is annexed to this report as Annexure I and is available on our website www.magellanic-cloud.com.

COMPOSITION OF STAKEHOLDERS RELATIONSHIP COMMITTEE

Your Board has constituted a Stakeholders Relationship Committee to specifically look into the mechanism of redressal of grievances of shareholders etc. The Committee reviews Shareholder’s / Investor’s complaints like non-receipt of Annual Report, physical transfer/ transmission/transposition, split/ consolidation of share certificates, issue of duplicate share certificates, etc. This Committee is also empowered to consider and resolve the grievance of other stakeholders of the Company including security holders.

The other details of the Stakeholders Relationship Committee are given in the Corporate Governance Report, appearing as a separate section in this Annual Report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 in respect of employees of the Company, is enclosed as Annexure IIand forms part of this Report.

Further, no employee of the Company is earning more than the limits as prescribed pursuant to Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 in respect of employees of the Company.

Further, the names of top ten employees in terms of remuneration drawn are disclosed in Annexure III and forms part of this Report.

ANNUAL RETURN:

Pursuant to Notification dated 28th August, 2020 issued by the Ministry of Corporate Affairs as published in the Gazette of India on 28th August, 2020, the details forming part of the extract of Annual Return in Form MGT-9 is not required to be annexed herewith to this report. However, the Annual Return will be made available at the website of the Company at www.magellanic-cloud.com.

DETAILS OF SUBSIDIARY/JOINT VENTU RES/ASSOCIATE COMPANIES

The Statement AOC-1 pursuant to the provisions of Section 129 (3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014 regarding Subsidiary Company is enclosed as Annexure IVto this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report, which gives a detailed state of affairs of the Company’s operations forma a part of this Annual Report as Annexure V.

STATUTORY AUDITORS’ AND AUDITORS’ REPORT

The Members of the Company at 41^th Annual General Meeting ('AGM’) held on 10^th August, 2022 approved the appointment of M/s. Bhuta Shah & Co. LLP Wednesday, August 10, 2022, Chartered Accountants (Firm Registration No. 101474W/W100100) as the statutory auditors of the Company to hold office till the conclusion of the 45^st AGM to be held in the financial year 2027.

SECRETARIAL AUDIT

In terms of Section 204 of the Companies Act, 2013 and Rules made there under, Mr. Deep Shukla, Practicing Company Secretary, have been appointed Secretarial Auditors of the Company. The Secretarial Audit Report is enclosed as Annexure VIto this report.

EXPLANATION(S)/ COMMENT(S) PURSUANT TO SECTION 134(3)(f)(i)& (ii), IF ANY, OF THE COMPANIES ACT, 2013:

Explanation pursuant to Section 134(3)(f)(i):

There are no adverse remarks/Qualifications made in Statutory Report issued by Statutory Auditor of the Company.

Explanation pursuant to Section 134(3)(f)(ii):

1. Non- compliance of I EPF rules, as amended

Reply:

The Company is in process to complete the same.

ANNUAL SECRETARIAL COMPLIANCE REPORT

Mr. Deep Shukla & Associates, Practicing Company Secretaries, have been appointed to give Annual Secretarial Compliance Certificate. The Annual Compliance Certificate is enclosed as Annexure VII to this report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls system. The Audit Committee of the Board periodically reviews the internal control systems with the management and Statutory Auditors. Significant findings are discussed and follow-ups are taken thereon.

Further, the Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

EMPLOYEES’ STOCK OPTION PLAN

During the year ending 31 March 2022, shareholders of the company have passed resolution for Introduction of 'Magellanic - Employees Stock Option Plan 2022’ to the eligible employees of the company up to a maximum of 15,00,000 (Fifteen Lakhs) options. However, till the date of this report, no options have been granted and hence disclosures under Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014, and amended and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are not applicable for the year ending 31st March 2023.

RISK MANAGEMENT POLICY

The Board of Directors of the Company has constituted Risk Management Committee to frame, implement and monitor the risk management plan for the Company under Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company has laid down the procedure to inform the Board about the risk assessment and minimization procedures. These procedures are reviewed by the Board and the committee periodically to ensure that there is timely identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting.

DEPOSITS

The Company has neither accepted nor renewed any fixed deposits during the year under review. There are no unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on March 31, 2023.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of loans granted and investments made by the Company under the provisions of Section 186 of the Companies Act, 2013, are provided in standalone financial statement under Note 06 under Notes forming part of financial statement.

INSURANCE

The properties/assets of the Company are adequately insured.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is committed to discharging its social responsibility as a good corporate citizen. As per the Financial Statements for the period under review, stating an increment in the profit margins of the Company, which made applicable the provisions of Section 135 of Companies Act, 2013 on the Company w.e.f 01.04.2023. Consequently, the Company is required to formulate the Corporate Social Responsibility (CSR) Committee, if applicable as per stipulated provisions and Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, with the recommendation of the Board, and on the recommendation of such committee (if any), the Company shall spend such amount as may arrived by them on the basis of financial statements during the financial year 2023-24 and shall take note on the Report of the same in the ensuing financial year.

CORPORATE GOVERNANCE CERTIFICATE

We ensure that, we evolve and follow the corporate governance guidelines and best practices sincerely, not only to boost long-term shareholder value, but also to respect minority rights. We consider it our inherent responsibility to disclose timely and accurate information Company.

In compliance with Regulation 34(3) read with Schedule V(C) of the SEBI (LODR) Regulations, 2015, a Report on Corporate Governance forms part of this Annual Report. The Certificate as issued by Practicing Company Secretary certifying compliance with the conditions of corporate governance as prescribed under Schedule V(E) of the SEBI (LODR) Regulations, 2015, is annexed to the Corporate Governance Report as Annexure VIII.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In compliance with SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Business Responsibility and Sustainability Report is attached and is a part of this Annual Report as set out in Annexure IX of this report and is also available on Company’s website at www.magellanic-cloud.com

DISCLOSURE ON COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has set up an Internal Complaints Committee for providing a redressal mechanism pertaining to sexual harassment of women employees at the workplace. There was no case of sexual harassment reported during the year under review.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

(a) Conservation of Energy -

We continue to strengthen our energy conservation efforts. We are always in lookout for energy efficient measures for operation, and value conservation of energy through usage of latest technologies for quality of services. Although the equipments used by the Company are not energy sensitive by their very nature, still the Company is making best possible efforts for conservation of energy, which assures that the computers and all other equipments to be purchased by the Company strictly adhere to environmental standards, and they make optimum utilization of energy.

(b) Absorption of Technology -

In this era of competition, in order to maintain and increase the clients and customers, we need to provide best quality services to our clients and customers at minimum cost, which is not possible without innovation, and adapting to the latest technology available in the market for providing the services.

(c) Research and Development (R&D) -

The Company believes that in order to improve the quality and standards of services, the increasing along with the scale of operations of the Company.

(d) Foreign Exchange Earnings and Outgo -

During the financial year under review, the status of foreign earnings and outgo are:

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

The Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9^th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

The Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.

SECRETARIAL STANDARDS

The Company has in place proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by The Institute of Company Secretaries of India and such systems are adequate and operating effectively.

LISTING WITH STOCK EXCHANGE

The shares of the Company are listed on BSE only.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Courts / Tribunals which would impact the going concern status of the Company and its future operations.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors, Officers and designated employees of the Company. The Code requires pre-clearance for dealing in the Company’s shares and prohibits

the purchase or sale of Company shares by the Directors, Officers and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code.

ACKNOWLEDGEMENT

The Directors would like to thank all shareholders, customers, bankers, suppliers and everybody else with whose help, cooperation and hard work the Company is able to achieve the results. The Directors would also like to place on record their appreciation of the dedicated efforts put in by the employees of the Company.

For and on behalf of the Board of Directors

Jagan Mohan Reddy Thumma Joseph Sudheer Reddy Thumma

Director Managing Director

[DIN: 06554945] [DIN:07033919]

Date: September 2, 2023

Registered Office:

6th Floor, Dallas Center,

83/1, Plot No A1, Knowledge City,

Rai Durg, Hyderabad, Telangana - 500032.